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Psenicska v. Twentieth Century Fox Film Corporation

IP/Entertainment Case Law Updates November 25, 2009

The Second Circuit affirmed the dismissal of plaintiffs’ consolidated action for fraud and other claims against the producers of the movie Borat , because plaintiffs signed consent agreements to appear in the film and disclaimed any reliance on defendants’ oral representations about the nature of the film.

Plaintiff individuals appearing in the movie Borat - Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan sued defendant producers of the film for fraud and other causes of action, based on defendants’ alleged oral misrepresentations about the nature of the movie. Plaintiffs argued that defendants had a duty to disclose more information about the nature of the movie in which they appeared.

The district court dismissed the action, finding that the claims were barred by plaintiffs' signed consent agreements, disclaiming reliance on any promises or statements and permitting the use of plaintiffs' images in a “documentary-style” film. Plaintiffs appealed the district court's decision.

Plaintiffs argued on appeal that the district court erred in finding that Borat was a “documentary-style” film because the term “documentary-style” is ambiguous. Plaintiffs also argued that the disclaimer did not bar their fraudulent inducement claims because defendants had peculiar knowledge of the facts underlying their misrepresentations to plaintiffs.

In a summary decision, the court of appeals affirmed the dismissal, finding that no reasonable trier of fact could find that the movie was not a “documentary-style” film because, although Borat is a fictional character, the movie includes interviews with real people and records real events. Therefore, the movie was unambiguously a “documentary-style” film, and the consent agreement barred the plaintiffs’ claims.

The court also held that the disclaimer precluded plaintiffs' fraudulent inducement claims. A fraudulent inducement claim requires proof of reasonable reliance on the defendants’ misrepresentations, and by signing the consent agreement, plaintiffs disclaimed reliance on extraneous promises or representations. Plaintiffs argued that the disclaimer was void because the defendants had "peculiar knowledge" of the facts underlying their oral misrepresentations to plaintiffs. The court found that plaintiffs could have easily verified any oral representations on which they relied or insisted that such representations be integrated into the written agreement before signing it.